Have you read your Deed of Trust or Mortgage Note?

Posted by Carolyn A. Capalbo on Sunday, October 10th, 2010 at 11:17pm.

As the media focuses in on the latest foreclosure scandal regarding “Robo Signers” and the heartless, cruel and greedy banks, I took the time to read my Deed of Trust.  In Virginia, most mortgages are non-judicial Deeds of Trust.  My Deed of Trust is only 19 pages long and has two riders that attach making the entire document only 26 pages long.  The document is very straightforward and outlines what the bank and I have agreed upon.  It is a contract that afforded me the opportunity to purchase my home provided I adhered to the terms specified in the Deed of Trust.  The Deed of Trust outlines how the bank can accelerate the loan and the steps involved with foreclosure.  This document is non-emotional.  It does not outline special terms for an appreciating market or a depreciating market.  It does not outline processes for personal hardships.  It does not reflect lender greed or insensitivity.  I believe the document assumes a competency level for both parties involved.  The Deed of Trust is not evil or scary; it is a business contract, a collateralized loan.     

In Virginia, the entire foreclosure process can be as short as 117 days.  Many banks could not handle the increased volume of defaulted borrowers and this time line has dramatically lengthened.    The Deed of Trust outlines the number of times the lender needs to advertise the foreclosure sale and the distribution of sale proceeds.  If you have not read your Deed of Trust, I urge you to do so.  If you live in Northern Virginia in Prince William, Loudoun or Fairfax Counties and can’t find a copy of your Deed of Trust, I will locate a copy through public records for you if you like.  This is an important document that needs to be read and understood.   

The underlying drama with the banks and “Robo Signers” still does not negate the fact that the most borrowers in question are seriously delinquent and in default.  I had the opportunity to chat with a person in foreclosure yesterday who was angry and complaining that the bank would not help her with a modification.  She cried to me that she didn’t want to lose her home that she had small children and they deserved to grow up in their 2400 square foot home.  As we chatted further, I asked her when the last time she made a mortgage payment was, she didn’t know.  I asked her over the past 24 months, how many times she made a mortgage payment, she told me maybe 5 or 6 times.  She said after the first time the bank did a modification, she made 3 consecutive payments before she stopped.  She told me that she was getting some paperwork together so the bank would stop the foreclosure.  I asked her when the bank requested the paperwork; she said 2 or 3 weeks ago.   After 2 years of mostly non-payment, she did not think that the bank would actually ever foreclose on her.  She avoided paying roughly $50,000 in unpaid mortgage due to the bank over the past 2 years.  I am curious to know how that makes you feel.  Please respond and share your thoughts with me!

Carolyn Capalbo, Best Northern VA REALTORCarolyn Capalbo,
Northern Virginia REALTOR®


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